Donald Trump cannot move ahead with his plan to dismantle his charitable foundation because state prosecutors are probing whether the president-elect personally benefited from its spending, the New York attorney general's office has said.
"The Trump Foundation is still under investigation by this office and cannot legally dissolve until that investigation is complete," said Amy Spitalnick, spokeswoman for state Attorney General Eric Schneiderman.
The statement came after Mr Trump announced that he wanted to dissolve the Donald J Trump Foundation, part of what his presidential transition team says is an effort to erase any potential conflicts of interest before he takes office on January 20.
But the foundation's inner workings have been the subject of Mr Schneiderman's investigation for months and could remain a thorny issue for Mr Trump's incoming administration. Democrats nationally have said they are ready to raise any legal or ethical issues from the tycoon's global business empire during his presidency.
The charity has admitted it violated IRS regulations barring it from using its money or assets to benefit Mr Trump, his family, his companies or substantial contributors to the foundation.
The admissions by the Donald J Trump Foundation were in a 2015 tax filing made public after a presidential election in which it was revealed that Mr Trump has used the charity to settle lawsuits, make a $25,000 (£20,400) political contribution and purchase items, such as a painting of himself, that was displayed at one of his properties.
The 2015 tax filing was posted on the non-profit monitoring website GuideStar on November 18 by someone using an email address from the foundation's law firm, Morgan, Lewis & Bockius, said GuideStar spokeswoman Jackie Enterline Fekeci.
In the tax filing, the foundation acknowledged it used money or assets in violation of the regulations not only during 2015, but in prior years. But the tax filing does not provide details on the violations.
Mr Schneiderman, a Democrat, launched his investigation into the charity after reporting by The Washington Post drew attention to some of the foundation's purchases.
Mr Trump asserted on Twitter on Monday that his foundation was run efficiently.
"The DJT Foundation, unlike most foundations, never paid fees, rent, salaries or any expenses," the president-elect tweeted. "100% of the money goes to wonderful charities."
Meanwhile, Mr Trump has tapped an experienced national security adviser to serve as assistant to the president for homeland security and counter-terrorism.
A statement on Tuesday from Mr Trump's transition team said Thomas Bossert will advise the president on issues related to homeland security, counter-terrorism, and cybersecurity, and he will coordinate the cabinet's process for formulating and executing policy.
The position "is being elevated and restored to its independent status alongside the national security adviser", the statement said.
Policymakers have long debated whether such national security jobs should operate independently from the White House.
Mr Bossert will work closely with Mr Trump's pick for national security adviser, retired Lt Gen Michael Flynn. Mr Bossert is currently president of the risk management consulting firm CDS Consulting. He previously served as deputy assistant to the president for homeland security under President George W Bush.
Mr Trump has also continued to question the effectiveness of the United Nations, saying on Monday that it is just a club for people to "have a good time", after the UN Security Council voted last week to condemn Israeli settlements in the West Bank and east Jerusalem.
On Friday, Mr Trump warned: "As to the UN, things will be different after January 20th," referring to the day he takes office.
The decision by the Obama administration to abstain from Friday's UN vote brushed aside Mr Trump's demands that the US exercise its veto and provided a climax to years of icy relations with Israel's leadership.
That was only one subject Mr Trump tackled on Twitter on Monday. In an evening post, he wrote that he believes his election as president has boosted the economy.
"The world was gloomy before I won - there was no hope," he tweeted. "Now, the market is up nearly 10% and Christmas spending is over a trillion dollars."
Markets are up since Mr Trump won the general election, although not by that much. The Standard & Poor's 500 is up about 6% since election day, while the Dow has risen more than 8%.